Mortgage broker - ask me anything

NatNat77

Hi
I wonder if anyone can help, Sarah I can see this thread is keeping you busy! 

So, in brief, our buyer has an issue on their credit report that apparently only came to light yesterday after santander did their hard credit check. They physically valued our property on 6 Nov (which was fine apparently) and we accepted our buyers offer 2 months ago, although I'm not sure when they started their app. I have been quite patient but I was getting concerned about their ability to get a mortgage due to how long its taking even with covid, and missing the SDLT deadline if we wait much longer so I messaged the EA yesterday saying we're thinking about putting our house back on the market. So after no reply to my message and two calls today he finally calls me back with the update.

I just can't believe the bank would have sent someone to physically value our house before doing a hard credit check that they can do online (presumably quite quickly/easily?). There are other elements that seem a bit fishy but if I am right about this it will help me know I'm making the right decision. Does anyone have experience of this happening?
Thanks in advance x

K_S

fizzgog said:

Hi, thanks for this thread, Just had a hard search by Halifax on myself today, but not my wife? Is this normal? Thought I'd have received an email with a decision by now, is it usually after they've done the number,s or via letter?
Got an awful feeling it been declined :-(

There should be a hard check on both borrowers but it might just be that isn't showing yet. It doesn't suggest anything either way.

Has a valuation happened yet? If it's through a broker they will let you know soon as they get an email with the offer and forward it on to you. The physical offer (just a printed copy) will come through in the post a few days later with another copy going to the solicitor named on the application.

Sorry, not sure what happens when it's a direct app.

Easier said than done, but don't worry!

MFWannabe

zippy08 said:

Fix or not?

That question again! What is the current thinking on this thread - is it worth fixing for 5+ years at this time, or go with a cheaper 2-year fix, betting on not much advance in the BoE Base Rate in that timeframe?
I'm on a 2.1% SVR interest-only deal and 24% LTV, and would ideally like to switch to a repayment mortgage.

What’s the interest rates on the 2 year and 5 year fixes? 
As you are only 24% ltv how quickly do you think you’ll be able to pay off the outstanding amount? I f it’s likely to be less than 5 years then I wouldn’t fix for 5 years as there will be ERC’s 

zippy08

MFWannabe said:

zippy08 said:

Fix or not?

That question again! What is the current thinking on this thread - is it worth fixing for 5+ years at this time, or go with a cheaper 2-year fix, betting on not much advance in the BoE Base Rate in that timeframe?
I'm on a 2.1% SVR interest-only deal and 24% LTV, and would ideally like to switch to a repayment mortgage.

What’s the interest rates on the 2 year and 5 year fixes? 

As you are only 24% ltv how quickly do you think you’ll be able to pay off the outstanding amount? I f it’s likely to be less than 5 years then I wouldn’t fix for 5 years as there will be ERC’s 

2% on 2-year fix
2.01% on 5-year fix
So not much between the two.
I don't think I could repay the o/s amount in 5 years unless I stretched things for that time - probably not feasible. I'd be left with a small-ish balance at the end of the five years that I could potentially settle from other funds available at the time.

MFWannabe

zippy08 said:

MFWannabe said:

zippy08 said:

Fix or not?

That question again! What is the current thinking on this thread - is it worth fixing for 5+ years at this time, or go with a cheaper 2-year fix, betting on not much advance in the BoE Base Rate in that timeframe?
I'm on a 2.1% SVR interest-only deal and 24% LTV, and would ideally like to switch to a repayment mortgage.

What’s the interest rates on the 2 year and 5 year fixes? 

As you are only 24% ltv how quickly do you think you’ll be able to pay off the outstanding amount? I f it’s likely to be less than 5 years then I wouldn’t fix for 5 years as there will be ERC’s 

2% on 2-year fix
2.01% on 5-year fix
So not much between the two.
I don't think I could repay the o/s amount in 5 years unless I stretched things for that time - probably not feasible. I'd be left with a small-ish balance at the end of the five years that I could potentially settle from other funds available at the time.

Personally I’d fix for 5 years, especially as there’s so little difference between the two 
Its already been noted that interest rates on mortgages have started to go up and I think the longer I can lock in the better, I think interest rates are going to climb at some point in the near future, not likely to go down 
but that is my opinion 🤔

fizzgog

K_S said:

fizzgog said:

Hi, thanks for this thread, Just had a hard search by Halifax on myself today, but not my wife? Is this normal? Thought I'd have received an email with a decision by now, is it usually after they've done the number,s or via letter?
Got an awful feeling it been declined :-(

There should be a hard check on both borrowers but it might just be that isn't showing yet. It doesn't suggest anything either way.

Has a valuation happened yet? If it's through a broker they will let you know soon as they get an email with the offer and forward it on to you. The physical offer (just a printed copy) will come through in the post a few days later with another copy going to the solicitor named on the application.

Sorry, not sure what happens when it's a direct app.

Easier said than done, but don't worry!

No valuation as yet, and Halifax still needs to ask my wife for permission for search.
Bit of background. House is £120K, we've asked for £100K mortgage.
Have £48K from sale of current house, £15K of CC to clear on completion of sale, £5K fees set aside,£20K deposit & £8K for decorating.

Both aged 55.

Passed affordability checks, so only concern is current debts which will be cleared.

No CCJ's, defaults etc, all payments upto date.

motherlode

Hi everyone! 

hoping someone can help reassure me about my upcoming Natwest application. 

My wife works part time but picks up a fairly significant amount of weekly overtime. I've spoken to a few people at Natwest and all seem to have advised me differently with regards to if/how the overtime can be accepted as income. It's made more complicated by the fact that my wife only started this role in September 2019, and the overtime only began in April 2020, meaning that she doesn't have a P60 to support it. However it is shown on all payslips for the last 8 months.

So far by Natwest I've been told:
1) They will take the average of the last 3 months overtime and annualise it
2) They will take the last 12 months
3) They will take none of it as the P60 doesn't support the overtime
4) They will take the last 6 months and annualise it

The following is from the Natwest for intermediaries lending criteria site, which seems to match number 4 above, but as we've been told so many different things I don't know what to believe anymore!

Overtime
We can consider 100% of regular overtime evidenced by the last 3 months consecutive payslips and most recent P60.  If the most recent P60 is unavailable, or doesn’t support the 3 month annualised figure, we can still consider this income using the last 6 months consecutive payslips.

Do you have any experience of similar cases with Natwest? Would be great to get some clarification if possible!

Thanks in advance

Wunjo76

Hi all,
I have a quick question that i would be grateful for some feedback.  I am looking to let out my current property that I currently own out right.  I am planning to take out a BTL mortgage on this property for 75% of the value, the rental income should equate to around 300% of interest payments.  I am intending to take out a new residential mortgage on a new property i am planning to move in to and use the money from the BTL mortgage as a deposit.  Will the mortgage on the rental property (my current home) affect how much i can borrow as a residential mortgage on my new home?  As i understand it, the BTL mortgage is more than adequately funded by the interest payments so will not be an issue for most providers but i am just checking if in reality this is actually the case.
Appreciate any response, thanks in advance.

K_S

Wunjo76 said:

Hi all,
I have a quick question that i would be grateful for some feedback.  I am looking to let out my current property that I currently own out right.  I am planning to take out a BTL mortgage on this property for 75% of the value, the rental income should equate to around 300% of interest payments.  I am intending to take out a new residential mortgage on a new property i am planning to move in to and use the money from the BTL mortgage as a deposit.  Will the mortgage on the rental property (my current home) affect how much i can borrow as a residential mortgage on my new home?  As i understand it, the BTL mortgage is more than adequately funded by the interest payments so will not be an issue for most providers but i am just checking if in reality this is actually the case.
Appreciate any response, thanks in advance.

@Wunjo76 To answer just the question in bold, it depends on the lender. If the rental income covers the running costs of the rental property in full (as per their calcs), there are plenty of lenders who will disregard it for outgoings. If the rental is profitable (according to their calcs) there are some lenders who will even consider it as additional income and boost max borrowing.

K_S

motherlode said:

 However it is shown on all payslips for the last 8 months.

@motherlode If the OT is shown on each of the last 6 monthly payslips, Natwest can look at using it as other income at 100% of the annualised figure. All this subject to underwriting of course and what I state is their general approach, not specific to your case. Good luck!